Cigarillo producer Swisher International beat a $44 million antitrust jury verdict won by Trendsettah USA Inc. due to newly discovered evidence that Trendsettah’s CEO engaged in a federal tax fraud scheme, the Ninth Circuit ruled Friday.
Trendsettah alleged it contracted with Swisher to manufacture its own cigarillos called Splitarillo, but instead of competing, Swisher decided to limit the supply of Splitarillos. A jury ruled in Trendsettah’s favor on its antitrust and contract claims, and a lower court awarded it $44.4 million in antitrust damages and reduced the contract damages award to zero by stipulation.
The two companies entered into a contract in 2011 under which Swisher would supply Trendsettah with cigarellos that would be sold under the name Splitarillo. Trendsettah claimed that the Splitarillo was identical to Swisher’s own Swisher Sweet, which Swisher denied. But Trendsettah used different packaging and sold them for less than Swisher sold its Swisher Sweets.
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